The Kenosha telegraph. [volume] (Kenosha, Wis.) 1860-1888, 1887-05-20
JAY GOULD QUESTIONED.


The Railway king Examined Regarding
the Management of the Union Pacific
Road-His Memory Proves Faulty Con-
corning Transactions in Which Millions
Were Involved.
NEW York, May 1S-Jay Gould testi-
fed before the Pacific Railway Com
mission yesterday. He said he frstspecu-
lated in Union Pacific stock in the spring
of1SS3. The stock began to go down, and
the witness on inauiring into the cause
found the ROAD had an immense floating
Indebtedness, and si0.O00,90l In funds due.
Continuing, Mr.. Gould said
II never took any interest in the Kansas Pa
eific until 1878, and recall nothing of the pro-
posed consolidation with the Union Pacific as
early as 1885, I remember nothing of any ac-
ton looking to a unity of Interests between the
Kansas Pacific and Colorado Central at that
time. The Colorado Central had a connection
with the Union Pacific to Cheyenne
Nh. Gould was asked if he didn't know that
there was an agreement in 1879 for a union
Of the Kansas Pacific and Colorado Central
whereby the stock of the Kansas Pacific
was to be increased $4,000, 000i In reply to
the question he sai1i
Now that you recall it. there was; but it
vas never contaminated. We were trying
to force d pro rata with the Kahsas
Pacific, and this was one Of the att
iempts. The branch connecting with the
Union Pacific and Colorado Central was
built before 1878, but don't remember exactly
when. The effect of building this line was to
lessen the earnings of the Denver Pacific
increased my interest in Union Pacific from
1873 to 1873 I owned about 100000 shares in
1873. The entire issue was $4,000 shares"
Mr. Gould said the reason the pool was
started was to take the mass of securities
in one mans hands and issue consolidated
mortgage bonds as preliminary step to
placing the property on it's feet. Before
that all was confusion, it being impossible
to tell what the securities represented. He
10 eff in agreeing to accept 30 for his
pool secuuti3', and presu med that at
that rate he would get more than he paid
for them. Tle unstamped bonds had
a better lien than the stamped,
and the value of them was
fixed at 3d. There were S17=
900, 600 to be funded into "a, S55,30l
When it was demonstrated that the pool
agreement would not work the CONSOLE
dated mortgage was determined on-be-
tween April, 1878, and May, 1S79-the obs
ject Of which was to consolidate the heterA
ogenous mass of securities into one uni
form security. He didn't remember
whether this was before the st. Louis peo=
pie were bought out or not. Mr.. Gould
said he must have taken q prominent part
in fixing the rates for refunding and con.
tinued
After we had scooped in ali the securities
and the consolidated mortgage had been exc
cuted, the stock was issued to the holders of the
pool securities. / was respectable owner of
these. My books will show to what extent Mr.,
Sage took some of the St. Louis purchase.
don't know whether Mr. Dillon or Mr.. Ames
took any or not. I asked Commodore Garrison
to take some, but did not succeed The
ST. Louis people came on to New York
and made the offer to me- / made price and
told them that they could throw in as much as
they pleased, but would rather have it all.
think paid 1917 cents for it; my books may
show a different price. My books will show my
transac lions in Denver & Kansas Pacific securi-
ties between July l. 1878, and January 49, $780,
I owned 81 ZOO, 900 of these securities in Deem.
Der, 1879. At the time of the consolidation
owned &c, 800 shares of Union Pacific worth 937s
and $4,000 shares of Kansas Pacific worth 98.'
Regarding his purchase of the Amster-
dam syudicate's Kansas Pacific bonds Mr..
Gould said.
81 got word that the Amsterdam people
would sell out their interest in the Denver Pas
cific, but I had read Irving's Knickerbocker
history of New York and was afraid that they
would spend q day in smoking before they
made up their minds to sell, but finally mus
tered up courage to go to Amsterdam. I
reached there at ten q. m. and was called on
by the parties at eleven q. m. and bought and
paid for 100000 of bonds at IL I pre-
sumo paid "a for them, if that is the price for
which sold them to Mr.. Sage
Mr.. Gould here presented statements Of
his dealings in securities of the Kansas Pa
cific system, and continued:
81 had no transactions in ST. Joseph s. Den
yer prior to January, 1879. The total amount
tie over S1600,0O0 purchased for a little
more than 100000. In addition to the
stocks I held at the time of the consol-
idation I owned six per cent of consolidated
bonds of the Kansas Pacific to the amount of
1861, 00U and Union Pacific collateral Is in the
sum of 81 100000. The $3.50 shares of st. Joseph
& Denver were trimmings to the bonds and
went with them. [ sold stock and bonds to
Sage, Dillon and Ames at the same price at
which L bought them 1 sold few shares iii
the market They had become gilt-edged, and
Iprobably parted with them to pay hotel bills
The ST. Joseph bridge bonds of over $500, 600
were all purchased in one transaction at 70
cents. 1 sold $3.50 900 to Russell Sage and $780,
900 to Sidney Dillon at the same price. All of
this stock was kept until the transaction with
the Kansas Pacific. think took up the ST.
10 bridge receivers certificates from the differ
ent parties with whom they were placed by the
receiver. I built the Hastings & Grand Island
road and through that became the owner of
S220, $40 of its stocks. The Union Pacific adj
vanced the money to build the road and drew
on me. The stock held represented the actual
cost of construction. Tie total issue of the
bonds of the road was, think, 1915, 0OO and the
stock was 1850 shares.
II made large sale of Union Pacific stock
to Messrs. Cammack and Keene in 1879. On
the 1st of January / owned 10000 shares
of stock. On the oath of January, 1880, I
was clear on the books of the Union
Pacific railroad. There was q law in
Massachusetts that allowed anybody having
any claim against the railroad to attach the
stock and put it out of my name because a
claim had been trumpet up and my stock was
to be attached and destroyed as a collateral.
It was retransferred to me after the consolida-
ton. owned q, 900 shares of the Union Pacific
on January "a, $780,
Mr.. Gould said he purchased the Mis-
scuri Pacific in 1879 in order to protect the
Kansas Pacific. He was opposed to the
consolidation at first, aud offered his
check for $1,000, 900 to Sage, Dillon and
others if they would not ask him to
consent to it. He finally signed the
paper agreeing to carry the consoli-
dalton through after resigning as
director. The signature made the
consolidation an assureA fact, because wit
ness held a controlling interest in Kansas
Pacific. In answer to Commissioner
Anderson's searching questions regarding
the handling of the Denver Pacific stock
trust Gould replied vigorously and gesticu-
lated violently. He seemed greatly in
censed at tue imputation of a dishonorable
deal between Sage and himself with
reference to this trust.
Mr.. Gladstone Invited to Americ by Pres
fdent Fitzgerald.
LINCOLN, Neb., May 1S.-President Fitz-
gerald of the Irish National League in
America has sent this dispatch to MIR.
Gladstone:
Learning from London cable dispatches
that there is possibility OF your visiting Amer
lea during the coming autumn 1 hasten, as